Commentary

Leading in Uncertain Times

In times of uncertainty, good leaders lean into crisis and are able to fully engage, motivate, and inspire their team. The serious and stressful challenge of the COVID-19 crisis demands that leaders embrace flexibility, curiosity, and openness to diverse perspectives.

Commentary

The Distinction between a Company and Its Stock Price

We at Research Affiliates recently conducted our first virtual All Hands meeting after finding ourselves working from home in the wake of the COVID-19 crisis. As CIO, I responded to questions about our investment strategy. Katy Sherrerd, CEO, and Jeff Wilson, Head of Distribution, asked me to elaborate more broadly on my response to one of the questions submitted by email the day prior.

Commentary

With Volatility Comes Opportunity

Uncertainty continues to dominate global securities markets and heightened volatility is the result. Feifei Li, partner and head of equities, asks Rob Arnott, the founder and chairman of Research Affiliates, about the implications of increased volatility on investment strategies and where investors can find the best opportunities.

Commentary

This Too Shall Pass

Rob Arnott shares his perspective on the ongoing market crisis in a Q&A with Jonathan Treussard. He suggests the time to buy is when investors are at “peak fear.” In the weeks ahead, that point will come and bargains will make themselves self-evident to the disciplined investor. The window of opportunity will be short, but highly rewarding over the longer term.

Commentary

Oh My! What’s This Stuff Really Worth?

What impact will coronavirus and market volatility have on your portfolio?

Commentary

Reports of Value's Death May Be Greatly Exaggerated

The current drawdown has been by far the longest as well as the second largest since July 1963, eclipsed only by the tech bubble from 1997 to 2000. Arnott, Harvey, Kalesnik, and Linnainmaa examine the potential causes of value’s underperformance and provide estimates of value’s performance relative to growth’s performance under different revaluation scenarios over the next decade.

Commentary

Forecasts or Nowcasts? What’s on the Horizon for the 2020s

Now is the season for forecasting as one decade turns into the next. Pundits and market prognosticators too often treat nowcasts as true market forecasts, which can be very dangerous for investors’ financial health. Our forecasts for the decade ahead rely on empirically driven quantitative models.

Commentary

Plausible Performance: Have Smart Beta Return Claims Jumped the Shark?

To get the attention of smart beta investors in a crowded marketplace, some smart beta providers are laying claim to performance that appears implausible. So what is plausible? We look at historical live performance to answer this important question.

Commentary

Standing Alone Against the Crowd: Abandon Value? Now?!?

Key Points

  • In a prolonged anti-value momentum-driven rally, it’s easy and natural to forget the long-term value proposition of a rebalancing discipline.
  • The evidence and intuition underlying a contrarian value investing discipline has proven merit in cycle after cycle across history.
  • By steadily rebalancing against the market’s most extravagant bets, RAFI strategies are positioned to recoup accumulated shortfall at the cycle’s turn, delivering meaningful long-term value-add.
  • The continued outperformance of today’s most dominant companies is unlikely to be sustainable in the long run.
Commentary

The Advisor’s Case for Smart Beta Direct Indexing

Smart beta direct indexing is an increasingly accessible implementation route that accommodates tax-loss harvesting and customizations based on client preferences and circumstances.

Commentary

Bubble, Bubble, Toil and Trouble

Looking back over the last 15 months, the authors assess their success at identifying asset bubbles and anti-bubbles in April 2018. The scorecard is in their favor. More importantly, however, they review how their definitions of a bubble and an anti-bubble continue to provide useful insights for where investors can find value in today’s global markets.

Commentary

Dismiss MMT at Your Peril

Modern Monetary Theory (MMT) informs today’s progressive policy agenda, even though many prominent economists consider it flawed, nonsense, or just plain wrong.

Commentary

The Inverted Yield Curve

Cam Harvey speaks to the currently inverted yield curve as an indicator of a slowing economy, further expounding on his Conversations of January 2019.

Commentary

Strike the Right Balance in Multi-Factor Strategy Design

One thing is for sure, investing means buying and selling, and these two activities aren’t free. Regardless of how promising the strategy looks on paper, its benefits will be reduced to some degree through its implementation. A worthy goal, therefore, is to limit the toll implementation takes on a strategy’s execution.

Commentary

The Flattening Yield Curve

Cam Harvey looks at the yield curve today through the lens of his 1986 pioneering work on yield-curve inversions and their foreshadowing of economic downturns.